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HomeMy WebLinkAbout_Developer Responses to City Follow Up QuestionsDeveloper Responses to City Follow Up Questions T. Wall Enterprises- The Mill on Main 1. What is the developer’s desired timeline for the Pioneer Drive Riverwalk and E. 9th Ave extension construction? Our proposal is seeking for The Pioneer Drive Riverwalk and E. 9th Ave extension construction to be completed in spring 2023, congruent with the completion of Phase 1 construction. If we are able to secure approvals and permits sooner, we would ask that construction of the Riverwalk and E. 9th Ave extension be completed sooner. 2. What are developer’s expectations for city involvement in remediation for the site? The Developer would ask that the City cap the site and remediate in accordance with DNR standards depending on the site and conditions. After the City remediates and caps the site, our construction team will open the cap while doing earthwork, pouring footings and foundations, etc. then re-cap the site once finished. T. Wall Enterprises will also be seeking a brownfield grant from the Wisconsin Economic Development Corporation for remediation and removal of soils during construction. It should be noted that the grant was cut in half this year (from $500,000 to $250,000) thus leaving less funds to subsidize earthwork, hauling, and tipping fees. 3. What is your anticipated rent range for the residential units? Attached to this document is a summary of T. Wall Enterprises Market Study. It will show comparable rental rates vs the rates proposed for the subject property. We have also attached a Market Study from Bakertilly to reference, this is copy written by Bakertilly and is not for public use, strictly for internal City Staff use only. 4. Do you have a market analysis confirming that the rent ranges are realistic in the Oshkosh market? See Above. 5. Would the proposed fence enclose the entire property? The proposed fence would enclose the private green space on site. Not including the commercial/residential parking or the multi-family and mixed-use buildings (excluding the private clubhouse). The fence would be 3-4 ft high and decoratively built out of glass or cable to ensure it doesn’t obstruct any riverfront views. 6. Demographics Clarification Updated Demographics chart attached. Note that this chart portrays what typical demographics are at T. Wall Enterprises developments. 7. Where would you propose to include additional parking to accommodate the commercial uses if needed? Without the proposed parking on the west side of S. Main Street, our proposal still achieves a 1.32 parking ratio (stalls/units). Typically, our developments look for 1.1 parking ratio. Commercial/retail users would use surface parking during the day and residents would use it at night, as we do at many of our mixed-use properties (see Middleton Center). If additional parking is required for easy access to the riverfront restaurant, we may propose parking on the northwestern most open portion of the site (next to the riverfront restaurant) and/or seek for a parking easement from the northwest neighbors, although, this is dependent on the tenant needs and final parking counts. 8. Is the proposed Dog Park south of E. 9th Ave. private or public? If the City would prefer this Dog Park to be public, T. Wall Enterprises would be happy to open it to the public and ask that the city match our investment on the Dog Park costs, i.e., fencing and turf. 9. Would you need a liquor license? T. Wall Enterprises, the developer, will not need a liquor license, although our restaurant tenants will need them. There will likely be 2 or 3 restaurants using the proposed first floor retail and restaurant space therefore 2 or 3 liquor licenses would be needed. Alexander & Bishop Real Estate Capital Markets, LLC- RiverWalk on the Fox 1. What is the developer’s desired timeline for the Pioneer Drive Riverwalk and E. 9th Ave extension construction? Project construction would begin summer of 2022. The Developer would like to have the Riverwalk and also the 9th Ave extension work completed by December 2022. 2. What are developer’s expectations for city involvement in remediation for the site? The City of Oshkosh will remediate any environmental contamination and provide a clear DNR site notice. 3. What is your anticipated rent range for the residential units? Townhomes: $1,800 to $2,300 per month 1 Bed 1 Bath: $1,000 to $1,150 per month 2 Bed 2 Bath: $1,400 to $1,800 per month 4. Do you have a market analysis confirming that the rent ranges are realistic? Our rental rates we are achieving within our portfolio owned projects in the Oshkosh market provide us with actual real time market data. The Developer currently has eight multifamily projects in the Oshkosh market and obtains rental rates between $700 and $1,600 a month per unit. 5. How many underground parking spots do you propose to construct? Approximately 155 underground spaces. Additionally, each townhome unit will have a private 2 stall garage for a total of 40 covered spaces. 6. What is your justification for $6,820,000 of TIF assistance? The gap between market rents and project costs require TIF assistance in order to achieve a rate of return necessary to attract equity. Without TIF financing as a component of the capital stack, yields to equity would be in the low single digits. 7. Are you proposing to pay for the cost to relocate the sanitary interceptor main along E. 8th Ave? Buildings cannot be built on top of it if it remains in place. No, however, the Developer may be able to reposition a building to avoid or limit relocation costs. 8. How much commercial space are you proposing? Approximately 14,000 to 15,500 sf of net leasable area. 9. Would you need a liquor license? No, unless a specific commercial tenant on South Main Street requires one. Wesenberg Homes, YBR Properties, WHD Team- River North Development 1. What is the developer’s desired timeline for the Pioneer Drive Riverwalk and E. 9th Ave extension construction? Ideally both the Riverwalk and 9th Ave extension would be constructed concurrently with the first phase of our proposed development, that is, we would anticipate that these projects are completed within 22 months of awarding the development option. However, the majority of the proposed development could proceed even if this timeframe is delayed. 2. What are developer’s expectations for city involvement in remediation for the site? Our development team would intend to take the lead on any environmental remediation with the understanding that the city would play an active role in coordinating the site clean-up efforts. This would include coordinating a WI ‘Green Team’ to identify the work that has already been completed and potential grants and/or other funding opportunities. Given our proposal has several ownership teams, we anticipate at least 2 different financial institutions involved. While we are open to taking ownership of the site up-front, we anticipate the lending institutions might require for us to start with a 100-year ground lease, and take ownership upon receipt of a closure letter from the WI-DNR for the site. Beyond the potential grants and TIF assistance, we do not anticipate any further financial assistance being requested of the city and/or RDA. 3. Are condos owner-occupied? Yes the condos will be owner-occupied. 4. Are the boat docks proposed to be public or private? The proposed boat docks would be private. The condominium association would own, manage, and maintain the docks. The intent would be that each condominium owned would be offered the opportunity to purchase a dock space. Should any extra dock spaces be available, the condo association would then lease out the extra dock spaces to the general public. 5. What is the rent range for the residential units? Buildings C & D (4 story mixed-use) Buildings E, F, and G (2 story) 2 Bedroom: 950 sf @ $1,050 - $1,450 per month 2 Bedroom: 950 sf @ $900 - $1,100 per month 1 Bedroom: 750 sf @ $950 - $1,200 per month 1 Bedroom: 750 sf @ $750 - $950 per month 6. How much will the condos be sold for? We anticipate the condominiums to be sold between $400K to $850K, depending on their finish choices, building floor and relative location, and the associated views. 7. Do you have a market analysis confirming that the condo listing prices and rent ranges are realistic? We believe this to be a strength of our development team. Dr Timothy Hess, a statistician and co-founder of Invista Analytics, led a team of real estate analysts in reviewing the latest rental and condominium sales data to determine optimal rental rates and reasonable condominium sales prices. For the rental rates, the Invista team pulled Oshkosh rental data from the CoStar database on April 2, 2021. The sample included 2,268 two-bedroom units and 1,749 one-bedroom units. The median rents were $716 and $576 /mo respectively. In terms of rent/sf this worked out to $0.768 and $0.833 per sf per month. Focusing on upper-end comparables within central city, median rents for one and two-bedroom units are $782 and $997 /mo. Using a Bayesian Quantile Regression to predict the 97th percentile of the rental rates results in a maximum rental rate per square foot of $1.54 and $1.51 for one and two-bedrooms respectively, which in turn, for the units proposed would be $1,155 / mo and $1,435 /mo respectively. There is some minor variation in the unit sizes which account for the maximum rents being proposed. On the other hand, while we can estimate a market-rate maximum, part of the goal of our development proposal was to offer a range of housing opportunities. For buildings E, F, and G we wanted to provide workforce affordable housing yet still provide views of the river. These units will charge lesser rents, but will also not include amenities such as underground parking. For the condominium units, the team employed two sources of data. First, the Wesenberg Homes team has had numerous conversations with clients and prospective clients having finished the 23 units Preserve Condominium development this past year. While there is a difference between single-family condos and the proposed multi-family condominium units proposed, the unifying factor is that we will be offering stylish modern amenities with very minimal maintenance. Our most basic condo unit in the Preserve is selling for $320K. Moreover, several potential clients that we could not accommodate in the Preserve have expressed interest in purchasing a unit at the $400- $450K price point and were excited about the idea of living near downtown and the river walk. For the upper-end price points, we examined the data from the WI DOR Real Estate Transfer Return Database for condominium sales over the past year where the date of construction was within the past five years. Two hundred twelve total unit sales were extracted. Interns then reviewed each sale address via Zillow and Google maps to determine whether the condominium units were waterfront properties. Zillow listing were further screened to determine if an individual condo unit had waterfront views. Given the individual unit descriptions are usually pulled from real-estate listings, this is typically one of the first amenities that is called out. We then scaled the sales prices for each unit relative to the average sales price of a single-family home in the municipality within a five mile radius to the average sales price of single-family homes in Oshkosh. A total of 47 waterfront condo sales were identified. The first and third quartile of the adjusted sales prices were $309K and $782K respectively. Given our proposed sales prices are reasonably consistent with this finding we feel like our proposed sales prices are reasonable. 8. How much TIF assistance are you proposing? Our request, based off of our preliminary cost projections and income forecasting, is for a net present value of 25% of the estimated project costs. This works out to a net present value of roughly 30% of the estimated increment generated and can be paid off with 90% of the increment over 20 years of payback. 9. Would you need a liquor license? At this time we have not identified any requirement for a liquor license. However, it is entirely possible that a restaurant operator could seek to lease out a portion of the first floor commercial space and would desire a liquor license. Should this situation become a reality, we would work with both the city and prospective tenant to see if a liquor license is available at that time. 10. Who would receive the TIF paygo if the condos are privately owned? We acknowledge that our proposal, with three different but somewhat overlapping development/ownership teams, creates a unique challenge in the use of TIF. We envision the TIF being a substantial contributor to the environmental remediation efforts. That said, the three different ownership teams are proposing to create quite varying amounts of value and thus tax increment. In concept we have agreed to partition the costs of remediation fairly, but this doesn’t necessarily mean equally. Given the desire to split the remediation costs ‘fairly’ but having potentially varying increments, we may seek to work out development agreements whereby the allocation may not necessarily reflect an exact percentage of increment generated relative to the overall sight, but maintain the condition that any increment is only allocated if the funds are available. We note, however, that the paying of taxes by the condominium owners, does not preclude the proceeds of the increment going to the development team. Thus, the short answer to the question is that it would go to the development team. However, how it is split and with what assurances will need to be worked out likely after we have convened the Green Team and further understand the costs associated with the remediation efforts. Red Earth, LLC- Sawdust Apartments 1. What is the developer’s desired timeline for the Pioneer Drive Riverwalk and E. 9th Ave extension construction? Pioneer Drive Riverwalk to be completed within 2 years of Red Earth LLC taking ownership and E. 9th Ave extension to be completed within first 4years of taking ownership. 2. What are developer’s expectations for city involvement in remediation for the site? AECOM’S environmental summary states the following: “Based on the available data, it does not appear that active soil or groundwater remediation is necessary.” and “Fill soils from the subject property should remain on site or be managed offsite as a solid waste. AECOM has utilized several different methods, such as performance barriers, managing the soils on site, and establishing site-specific soil cleanup objectives to reduce material handling and disposal costs.” We intend on working with AECOM to best manage the soils on site and cap the needed areas. Much of this site will need to be raised and we intend to use as much existing fill as possible. Another possibility is to use unsuitable soils to create a sound barrier mound along the rail tracks and adequately cap those soils. Potentially a sound wall on top of the mound as well. In the event there are soils that need to be taken off site and mitigated it is our expectation that the city assume the hauling and mitigation/disposal expenses. We will work closely with AECOM and the city engineers to minimize as much of that expense as possible. 3. Are you open to developing first floor commercial uses along S. Main Street? Maybe. The question I think you are asking is whether a mixed use development is the “best use of land” on South Main Street frontage? The project as submitted provides an elegant solution to affordable future housing for downtown Oshkosh. It works and we have a high degree of confidence in the success of the business model presented. However, would having a design that incorporates areas for a possible fitness center, a microbrewery, a coffee shop etc. be a better solution. Frankly, we don’t know. There are mixed use developments that fill a void in the local market that are very successful. There are probably just as many mixed use developments that fail commercially; standing open. Brick and mortar establishments have had a large market shift in the last decade. An extensive market analysis would need to be done to evaluate the traffic patterns and needs of the local area before we could give you a definitive answer. 4. Would the public be permitted to walk in the shared plaza/trail near the public trailhead? Would the public be able to access the dog run on your site? No, however the public would not be prohibited from entering the site either. The shared plaza/trail and dog run are amenities that the tenants pay for as part of their rent and the Developers/Owners pay to maintain. The shared plaza/trail would be gated off at the entrances giving the tenants some privacy. However, we will not have security guards monitoring the trail or the dog run therefore the public could walk throughout the property without being prohibited from entering the site. Public would need to enter the site through S. Main street or E. 9th Ave making it inconvenient although possible to enter the property. 5. If the City does not agree to develop and maintain the proposed park south of E. 9th Ave, would you use the property? We would entertain a Right to Purchase for that parcel as part of the development agreement. Or since the park would largely benefit this development but also the greater surrounding community there could be a discussion about a split cost to develop and the city maintains it. This would increase our development costs which would then increase the maximum Pay-Go portion of the development agreement that would be paid back over time. These ideas and any others could be discussed in further detail. 6. Do you have a market analysis confirming that the rent ranges are realistic? We have done our own market analysis and are comfortable that we will fill the units as we build them. Many times while building our properties we have them fully rented before completion. In order to do this we often rent the units slightly under full market rate until the property fully stabilizes and then we achieve the needed rent rates over a period of time. According to apartments.com and apartmentfinder.com Anthem Luxury Living is fully occupied and offers 910sf- 1,171sf apartments ranging from $1,015-$1,485 per month. The new Brio property which has fewer amenities (no underground parking and fewer community type amenities) than both Anthem Luxury and our Sawdust Apartment proposal is listing 413 sf – 994sf apartments for $925-$1,750 per unit. Both of these newer apartment complexes are currently renting apartments that fall into the range we are looking to achieve. Saw Dust Apartments will be a mixture of 1, 2, and 3bedroom apartments from approximately 750sf-1,200sf However, a majority will be 2bed/2bath apartments and all units will have access to enhanced amenities such as our community/game room, theater, sauna, outdoor pool, and outdoor grilling/living areas. Tadych Investment Partners 1. What is the developer’s desired timeline for the Pioneer Drive Riverwalk and E. 9th Ave extension construction? DEVELOPER REQUESTS SUBSTANTIAL COMPLETION OF THE RIVERWALK ON OR BEFORE JUNE 1, 2022, AND SUBSTANTIAL COMPLETION OF THE 9TH AVE. EXTENSION ON OR BEFORE DECEMBER 31, 2022. 2. What are developer’s expectations for city involvement in remediation for the site? DEVELOPER REQUESTS THE CITY DELIVER THE SITE TO DEVELOPER IN A CONDITION WHICH ALLOWS DEVELOPER TO COMMENCE CONSTRUCITON WITHOUT PERFORMING FURTHER MITIGATION OF ENVIRONMENTAL MATTERS AND WITH A NFA OR EQUIVALENT FROM THE DNR. IN THE EVENT THAT STRUCTURES ON THE SITE WOULD REQUIRE MODIFICAITONS (I.E. SUBFLOOR VAPOR MITIGATION SYSTEMS) DEVELOPER WOULD BE RESPONSIBLE TO CONSTRUCT THE SAME DURING DEVELOPER’S CONTSTRUCTION PROCESS WITH CITY TO REIMBURSE DEVELOPER FOR THE COST OF INSTALLING SUCH MODIFICATIONS. 3. Has a market analysis been completed for Oshkosh to confirm the listing prices for the condos are realistic? DEVELOPER HAS NOT COMPLETED A FORMAL MARKET STUDY. WE HAVE HAD SEVERAL DISCUSSIONS WITH OUR LOCAL REAL ESTATE CONSULTANTS, GRANT SCHWAB AND MEGAN LANG, WHICH LEAD US TO BELIEVE THAT THERE IS SIGNIFICANT DEMAND FOR TYPE OF HOMES PROPOSED IN OUR PROJECT. WE WILL VERYIFY THE DEMAND LEVEL BY SEEKING FORWARD COMMITMENTS DURING THE DUE DILLIGENCE PHASE OF THE PROJECT. 4. Would you be willing to work with another developer to develop commercial along S. Main Street? YES, PROVIDED WE CAN COME TO AGREEMENT ON THE SCOPE, CHARACTER AND STRUCTURE OF THE CONTEMPLATED DEVELOPER AND PROJECT. 5. Do you plan to avoid the E. 8th Ave. sanitary main that cannot be built on? In your conceptual plan it appears that you built over the sewer. If it needs to be relocated, it would be at the developer’s expense. DEVELOPER CAN MODIFY ITS PLAN OR RELOCATE THE LINE. 6. Who would receive the TIF paygo if the condos are privately owned? THE TIF PAYMENTS WILL BE RETAINED BY THE DEVELOPER AS INCENTIVE TO PROCEED WITH THE PROJECT. OUR CURRENT UNDERWRITING CONTEMPLATES SELLING THE UNITS AT PRICES ROUGHLY EQUAL TO THE COST OF CONSTRUCTING THE SAME. THUS, THE REQUESTED TIF IS DEVELOPER’S “PROFIT” ON THE PROJECT. 7. Are the boat docks proposed to be public or private? THE BOAT DOCKS WOULD BE PRIVATE FOR THE USE OF UNIT OWNERS.